A trust isn't just for the wealthy. It's a powerful tool that helps protect your assets, avoid probate, and make sure your wishes are carried out.
A Will distributes assets, but a trust gives you more control over how and when your child inherits money. Without one, a child could receive their entire inheritance at age 18, before they may be ready to manage it wisely.
Why parents choose a trust
- Avoids probate. Assets in a trust bypass the probate process, so your loved ones can access them faster and without court involvement.
- Control over distributions. You decide when and how your children can access their inheritance.
- You choose who manages the money. If you are divorced, you might not want your ex managing the money you leave your children. With a trust, you choose, not a judge.
- Protection against mismanagement. A trust can keep a young beneficiary from spending an inheritance irresponsibly.
- Help if you're incapacitated. Your finances can be managed without a court-appointed guardian.
Choosing a trustee
A trustee manages the funds for your child's benefit. It can be the same person as the guardian or someone else entirely. Just be sure it's someone responsible and good with money.
Don't forget to fund it
If you've created a trust, transfer your assets into it. Many people assume that just having a trust avoids probate, but assets must be properly titled in the trust's name for it to work.